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Chip Shortage Worsens As New COVID Wave Hits Malaysia

A new outbreak of COVID-19 in Asia has slowed manufacturing capabilities in Malaysia and Taiwan, continuing a horror run for the semiconductor industry.

The Malaysia Semiconductor Industry Association predicts an enforced lockdown will reduce output by between 15 and 40 per cent.

The global semiconductor shortage was expected to recover to normal levels by the second quarter of 2022, according to a Gartner report released last month. Tech companies are under pressure to move production to the Chinese mainland to avoid larger shortages.

“The lead time for chip supplies has been extended to as long as 20 weeks, and we have to pay a skyrocketing price for urgently needed chips,” manager of a Chinese autonomous driving firm told the Global Times.

“There is no way out. We have to wait for an explosive surge in the supply of semiconductors, and we have no idea how long it will take.”

Malaysia is the world’s seventh largest semiconductor exporter, with Intel, STMicroelectronics, and Infineon Technologies all having production facilities in the country.

Taiwan is also experiencing a surge in COVID cases, with Wall Street Journal reporting: “At King Yuan Electronics Co, one of the island’s largest chip testing and packaging companies, more than 200 employees have tested positive for the virus this month, while another 2,000 workers have been placed in quarantine cutting the company’s revenue this month by roughly a third.”

 

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